Frequently Asked Questions on Country by Country Reporting


1. What is country by country reporting (CbC Reporting)?


"Country per Country reporting" covers the legal and procedural obligations according to which firms (and, in this context, banks) are requested to disclose in their annual reports the main figures of the activities they make in different countries.


2. Which figures are covered by CbC Reporting?

The CbC Report shall specify (a) the total amount of payments, including payments in kind, made to each government within a financial year and (b)    the total amount per type of payment made to each government within a financial year.

Furthermore, CbC Reporting includes:

(a)    profit before tax

(b)    taxes on profits;

(c)    royalties;

(d)    dividends;

(e)    signature, discovery and production bonuses;

(f)     turnover, both third party and intra-group, of the constituent entities that might give rise to payments being due

(g)    total number of people employed and their aggregate remuneration

(h)    expenditure on fixed asset investment during the course of the period


3. Why is CbC reporting so important?


Country by Country reporting is important because it would enable citizens and banks' customers to know where banks are making profits or pay taxes. But basic transparency requirements are not only important for customers and NGOs, they represent a key element of the fight against corruption and tax evasion. They also increase economic efficiency, as investors can invest without asymmetrical information.


4. Who is in favour of country by country reporting?

The European Parliament, in the text voted in May 2012, is in favour of including CbC Reporting in the 3rd revision of the Capital Requirement Directive (CRD IV). According to the article 86a of the European Parliament's text : "Member States shall require institutions [...]to prepare, have audited and make public as part of their annual financial statements a report on payments made to governments".

In the European Parliament, all major political groups (the European Popular Party [EPP], the Socialists and Democrats [S&D], the Alliance of Liberals and Democrats [ALDE], the Greens and the European Conservatives and Reformists [ECR)) are in favour of CbC Reporting.

The European Commission (and in particular Commissioner Barnier, in charge of this file) is also in favour of CbC Reporting.

Only the European governments (who sit at the Council of ministers) are still opposing CbC Reporting.

Outside the European institutions, banks are fighting against CbC Reporting and NGOs (Tax Justice Network, ATTAC, Eurodad) are campaigning in favour of it.

5. Why are the European governments against country by country reporting?


1) European governments claim CbC Reporting has nothing to do with Capital Requirements but want CbC to be included in the Transparency and Accounting Directive (TAD), which covers all sectors. However, the TAD is limited to extractive industries, as European governments always opposed the European Parliament's willingness to broaden the scope of the TAD.


2) European governments claim CbC Reporting has to do with taxation matters, which can not be dealt with by the European Parliament (a provision of the European treaties). The European Parliament replies that CbC Reporting is not about taxation policies but only about disclosure of key figures. Fiscal policies are an will remain the only competence of Member States.


3) Some governments underline that European banks' competitiveness will be damaged by such transparency. However, no commercially sensitive information is included in the scope of Country by Country Reporting. Moreover, the European Parliament believes that transparency reinforces competitiveness and does not affect it, as investors invest in safe environments.


4) Some governments care for their big banks and listen attentively to the banking lobby, which keeps repeating that not only CbC Reporting is too complex and rigid, but will affect their business figures. On the contrary, the European Parliament believes that banks, as multinationals, are already too complex and know perfectly how to benefit from the loopholes of the different national tax regimes.



More info:


Tax Justice Network Campaign:

OECD Report:

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